Crude ends a little shy of $100

Strong Dollar and renewed concerns at Eurozone put a cap on crude's gains

Better than expected economic data pushed crude prices higher on Tuesday, 15 November at Nymex. But renewed concerns in the Eurozone and strong dollar put a check on the gains. The earlier falls for oil came as a rise in Spanish and Italian bond yields triggered fresh concerns that Europe's debt problems were deepening, prompting selling across equity and commodity markets.



Light and sweet crude for November delivery rose $1.23 (1.3%) to $99.37 a barrel on the New York Mercantile Exchange on Tuesday. Last week, crude gained 5%. For the month of October, oil futures gained 18%. During the third quarter ending in September, crude incurred losses of 17%. It was the worst quarterly performance for crude in almost two years.

In the currency market on Tuesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.3%.

Most participants paid close attention to action in Europe this morning. Rising yields on Italy's debt and pressure against the region's major bourses undermined their sentiment earlier during the day but stocks at Wall Street managed to end the day with modest gains.

Economic data for the day showed that overall retail sales increased by 0.5%, but sales less autos actually increased by 0.6%. Meanwhile, producer prices for October proved cooler than thought, given the 0.3% decline in PPI and flat reading on core PPI.

Separately, the Empire State Manufacturing Survey surprised some by turning incrementally positive.

In the euro zone, the European Union's statistics agency reported earlier Tuesday that third-quarter gross domestic product across the region expanded by 0.2% compared with the second quarter and grew 1.4% versus the third quarter of 2010. But market still fear the region's long-running debt crisis could soon spell a return to recession.

Among other energy products on Tuesday, Gasoline for December delivery climbed 5 cents, or 2%, to $2.59 a gallon, and December heating oil added 1 cent, or 0.3%, to $3.17 a gallon.

December natural gas closed at $3.40 per million British thermal units, down 5 cents, or 1.6%.

At the MCX, crude oil for November delivery closed higher by Rs 114 (2.3%) at Rs 5,033/barrel. Natural gas for November delivery closed at Rs 174.8, lower by Rs 2.3 (1.3%).